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Come On In, the Water's Fine

The time is ripe for new IPOs.

Chinese gaming specialist Changyou.com(NASDAQ:CYOU) became just the third company to go public in this country over the past six months. The fast-growing company priced its IPO at $16 yesterday, only to close 25% higher.

It's easy to see why companies have been hesitant to go public. The market and economy are in shambles. Investors have grown weary and cynical. It takes a special kind of stock to warm up underwriters and willing investors given the prevailing headwinds.

However, let's take a closer look at the last three companies to complete their IPOs in this country.

If this favorable trend doesn't awaken the IPO pipeline, it's hard to imagine what will.

Rosetta Stone, the language software giant, should be the next company to step up to the plate. It had originally filed to go public in September, before shrewdly delaying its market debut. If it's able to pull off its offering later this month, it will clearly be paddling in kinder waters.

Higher learning specialist Bridgepoint Education is also on tap to go public, cashing in on the market's appetite when it comes to for-profit educators. It's a recession-resistant trend that has propelled Grand Canyon Education -- and peers like Apollo Group(NASDAQ:APOL) and Corinthian Colleges(NASDAQ:COCO) -- higher in recent months.

The IPO pipeline will turn into a literal gusher if Facebook comes through. The popular social networking site is now looking for a CFO "with experience at a public company." That is as good an IPO teaser as you're going to get from a want ad.

Not every IPO has to be a winner, though it's refreshing to see the cobwebs come off. As part of the Motley Fool Rule Breakers analyst team, our lifeblood is young disruptive growth stocks. We've found many of our winning picks, including Baidu(NASDAQ:BIDU) and Chipotle Mexican Grill(NYSE:CMG), by jumping in shortly after the IPOs.

Longtime Fool contributor Rick Munarriz has been a fan of China's high-margin gaming stocks for a long time. He is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.He does not own shares in any of the companies in this story. The Fool has a disclosure policy.

Author

Rick has been writing for Motley Fool since 1995 where he's a Consumer and Tech Stocks Specialist. Yes, that's a long time with more than 20,000 bylines over those 22 years. He's been an analyst for Motley Fool Rule Breakers and a portfolio lead analyst for Motley Fool Supernova since each newsletter service's inception. He earned his BBA and MBA from the University of Miami, and he splits his time living in Miami, Florida and Celebration, Florida.
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